Chile: GeoPark presses two-rig Magallanes program

By OGJ editors HOUSTON, Apr. 20 – GeoPark Holdings Ltd. has approved $80-90 million of capital spending in 2011, including $15 million in surface facilities on the Fell block in Chile, that includes plans to drill as many as 30 wells.

The company’s outlays were $58 million in 2010, when it completed and put on production 12 of the 15 wells drilled. The company has started four wells so far in 2011.

The company will spud Renoval, first well on the Tranquilo block, on the Esperanza prospect targeting a 715 bcf gas resource in the second quarter of 2011.

GeoPark is operating two drilling rigs and one workover/completion rig on the Fell block. It expects a 10-15% increase in total production, including a 40-50% increase in oil output, in 2011. Production averaged 6,947 boe/d in 2010, when oil production rose 59% and gas output fell 2%.

The March 2011 agreement under which LG International of Korea is to acquire a 10% equity interest in GeoPark’s Chile business for $70 million is to close in the second quarter. Under another agreement, Methanex Corp. is advancing funds with which GeoPark will drill 12 gas wells in 2011.